New Delhi: American multinational technology company Amazon is reportedly going to adopt a new salary structure that will considerably favour longtime top performers while reducing payouts for first-time high achievers and those with inconsistent performance records. According to the rules, old employees with a regular excellence record will gain substantially more than their newer counterparts.

According to internal guidelines obtained by Business Insider, employees who earn Amazon’s “Top Tier” performance rating for four consecutive years will now receive 110% of their pay range, exceeding the previous cap of 100%. Meanwhile, first-time Top Tier recipients will get 70% of their pay band, down from 80% last year.

“This approach ensures a steadier compensation progression,” states the internal pay guideline, referring to the company’s total compensation target metric. An Amazon spokesperson explained that the updated model “better distinguishes between newer high performers and those who have consistently exceeded expectations for their role and level.”

In a nutshell, Amazon’s new pay model rewards veteran top performers and cuts first-time achievers.

The revised structure places greater emphasis on an employee’s rating history rather than just current performance. Employees moving from lower ratings to Highly Valued 2 (HV2) will receive 10% of their pay range instead of the previous 20%, while those who drop from Highly Valued 3 (HV3) to HV2 will maintain 20%, indicating the company’s increased focus on past achievements.

Likewise, first-time HV3 recipients will receive 40% of their pay range rather than 50%, while employees with two consecutive Top Tier ratings will get 90% of their band instead of the previous 100%.

This change of police by Amazon represents a significant shift in how the e-commerce giant distributes compensation across its workforce. The changes clearly benefit employees who maintain top performance over multiple years while potentially disadvantaging newer high achievers and those with inconsistent performance records.

Similar performance-based compensation strategies have been implemented by other technology companies like Google, Microsoft, and Meta with stricter review policies and reduced rewards for underperformers.